Why Tech Valuations Keep Getting Bigger

I partially agree. One of the reason of the subprime bust was that investor bonuses were not risk adjusted. They would cross-buy subprime assets, cash in the high returns and associated bonuses, and ignore the risks. The very low interest rates, while not the only culprit, provided the money flow for those alternative assets.

I'm not arguing that alternative assets, VC specially (!), are bad. But just that liquidity provided by QE may be, tempting not-so-ethical fund managers and IBs close deals on unrealistic valuations fueled by a crazy stock market.

But creating a risk-adjusted yearly bonus scheme is not something easy. I'd be interested to know if the smart guys around here ever approached the issue.